Investment allowance, Finance, Other Engineering

Investment allowance

Until a few years ago, a company could charge an amount equal to 25 per cent of the original value of an asset as investment allowance in the period in which it was installed for production, and thus, it provided tax shield equal to investment allowance was to encourage investment in fixed assets by the corporate sector. The government withdrew investment allowance form April 1987. It was however reintroduced only in case of the high tech industries in 1988. The rate was 20 per cent. It has also been withdrawn now.

Investment deposit scheme

The government introduced the investment deposit scheme when the investment allowance scheme was withdrawn in 1987. Under this scheme as firm could deposit up to 20 per cent of the profits (before the set off of any unabsorbed business losses of earlier years) with the industrial development bank of India. For this the firm would be entitled to a deduction equal to the amount of deposit and or any new plant and machinery. The scheme has also been withdrawn now.

Other tax incentives

There are number of other tax and non-tax incentives available to a firm when it undertakes a new investment project.

The sales tax deferral is also available to a unit set up in a specific backward area. Sales tax equal to 4 per cent of gross sales collected from customers in allowed to be retained, free of interest, for a period of 7 years. This, the sales tax collected during a year needs to the remitted to the state government only in the 8th year. This concession is available for a period of 6 years from commercial production.
Posted Date: 1/31/2012 11:56:28 PM | Location : United States

Related Discussions:- Investment allowance, Finance, Assignment Help, Ask Question on Investment allowance, Finance, Get Answer, Expert's Help, Investment allowance, Finance Discussions

Write discussion on Investment allowance, Finance
Your posts are moderated
Related Questions
explain the fibre optic communication system with block diagram

career aspiration as a determinant to senior secondary school students performance in Technical drawing.

Inspecting a Sprinkler Systems: When inspecting a building that has sprinklers fitted it is not easy to check that the correct water pressure and flow rate can be achieved by

Q. What is slip? What is slip plane? What are principal if slip planes and slip direction for BCC, FCC and HCP crystal? Ans. X-ray diffraction studies show that the crystalli

what is q meter

what are the different phosphates used in water treatment?

stuck on a project that requires 5 outputs with 6 inputs and all formulas

Aerofoil theory and the axial flow compressor  The blades of the axial flow compressor are aerofoils and as such behave in a similar way to aircraft mainplanes and propeller bl

Function intersect - set operations: The function intersect returns, additionally to the vector having the values in the intersection of v1 and v2, an index vector into v1 and